Distributed Energy Resource Integration - … · Distributed Energy Resource Integration Lessons...

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Distributed Energy Resource IntegrationLessons Learned from U S Case StudiesLessons Learned from U.S. Case Studies

Alan RoarkGridwise Architecture Council: Transactive Energy Workshops

March 28, 2012

About DNV KEMA Energy & SustainabilityGeneration Power

Exchange Transmission System Operation

Substation Distribution Customer

Serving the Diverse Needs of the Energy MarketplaceFrom the Generator to the Consumer

Strategy, Operations, Energy Technology

Leading management consultant to the I d t

2,300 experts in over 30 countries d th ldenergy Industry

World-renowned engineering, consulting, and testing capabilities

around the world

Heritage of nearly 150 years .

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Independent advice, expertise, evaluation More information at www.dnvkema.com.

“Markets 3.0”

Wholesale energy markets have evolved th t t i t ti i th i d

Markets 3.0 2011-2020

that strive to optimize the economics and competition around supply and demand. These markets are characterized by the following trends:

• Dynamic retail pricing• DR for ancillary services• Capacity markets for firming & DR• Intra-hr scheduling of renewables• Storage as a resourcefollowing trends:

• Need to manage new products such as Demand Response, Energy Storage,

Markets 2.0• Co-optimized energy &

ancillary services

Storage as a resource

2001-2010

and Variable Energy Resources

• Penetration of and coupling with retail

y• Congestion pricing• Nodal real time dispatch• Capacity markets for DR

resources –use of DG and smart load resources from the industrial, commercial and residential sectors

Markets 1.0• Wholesale day ahead

energy on hourly schedules• Ancillary services• Balancing and regulation• Transmission rights

1995 - 2003

• Transmission rights

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Topics

Distributed Energy Resource Integration

Overview of Issues

Market Impacts


Dispatchable and D namic Pricing Demand Response

Market Impacts

Communication Requirements

Dispatchable and Dynamic Pricing Demand Response

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Overview of Issues Growth in investments in distributed energy resources – renewable

distributed energy generation, demand response (DR), energy storage, and plug-in electric vehicles (PEVs)storage, and plug in electric vehicles (PEVs)1) Monitor market impacts

- Short term forecasts to create visibility- Longer term indirect control of resourcesg- Determining Operational Reserve requirements

2) Communication infrastructure for Distributed Energy Resources3) Dispatchable and Dynamic Pricing Demand Response Instabilities) y g

Results from two case studies will be discussed

Findings highlight the fact that data can play an important supporting role in both electricity grid and market operations and indicate the need for additional research.

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Topics


Overview of Issues

Market Impacts



Market Impacts



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Project Overview: CAISO DER Develop Forecasts and Identify ImpactsIdentify penetration forecasts of Distributed Energy Resources (DER) on CA ISO’s system by 2020, including:y y , g• Distributed Utility & Customer Photovoltaic's• Distributed Energy Storage• Demand Response• Combined Heat and Power (CHP)• Self Optimizing Customer

Pl I El t i V hi l• Plug In Electric Vehicles

Create a Framework to Assess• CA ISO current visibility of these Distributed Energy ResourcesCA ISO current visibility of these Distributed Energy Resources• Benefits of reduced uncertainty through monitoring• Reduce variability through various control technologies

Id tif I li tiIdentify Implications• Determine Benefit/Costs of DER visibility• Determine Road Map for technology improvements to current

visibility requirementsvisibility requirements

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CHP ProfileCHPEnd-Use

Profile %

Load Data

Variability Drivers 1 Minute Profile

DispatchDDR DDR

Profile

Price Data

Load Data

p

DP

Outcomes

DP Profile

Profiles of DER Resources by zone for

i PLEXOS d i

Price Data

Temp. Data

DES ProfileDES

use in PLEXOS and in Step 1 Reserve Requirements Estimation

Price Data

Load Data

PV Profile

LegendEV

Data

TBD EV NREL ModelA/S = ancillary servicesCHP = combined heat and powerDER = distributed energy resourceDES = distributed energy storage systemDDR =dispatchable demand responseDP = dynamic pricing demand responsePEV = electric vehicleSOC = Self Optimizing CustomerPV h t lt i

EV

SOC ProfileSOC

TBDProfile

Temp. Data

Load Data

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PV = photovoltaicPrice Data

Most of the Fluctuations in the DER Profiles occur in 10 Minute Interval

99% of Load Adjusted for DER profile occurfor DER profile occur with 10 minute Ramps

Leads to relatively high Load Following Requirements

Similarly few rampsSimilarly, few ramps occur in <5 Minutes

Leads to relatively low Regulation Requirements

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What impact will different penetrations of DER have on the ISO requirements for regulation and load following?

Up

5,079 MW1,084 MW

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4,652 MW1,083 MW

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5,683 MW

760 MW

Max

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4,753 MW

749 MW

No Visibility Case Visibility Case

Visibility provides a large reduction in the 95th percentile of Load Following requirements Minimal Impact on Regulation

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Following requirements. Minimal Impact on Regulation.

High DER Case, all DER profiles Where do the benefits come from?

CAISO Benefits in millions $ for 2020

$ million$ million/year fromPV

$ million/year

*Savings/year

Savings/year

$ million/yearfrom DES

$ million/year from

CAISO Production CAISO Production

DR

$ million/yrAll others

CAISO ProductionCost With Visibility

CAISO ProductionCost With No Visibility

Visibility of PV, Distributed Storage and Demand Response can be expected to reduce production costs by more effective use of load following & regulating reserves

Topics


Overview of Issues

Market Impacts



Market Impacts



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Drivers for Communications Technology and Costs

PVgrid PVStorageUtility

StorageBehindMeter1 min

Rate of DER

grid PVBehindMeter

DDREVSmart

5 min SOC / MicroGrid DP

RealRate of DER State Change CHPDynamic

DDRDispatch

RealTime

CHPPrice Taker DP1-HourAhead EVDumb

1 hour

Density (units/square mile)

Device density and rate of change are the drivers for communications technology and coststechnology and costs.

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Critical Policy and Standards Issues Visibility as part of DER Interconnection Standards and for Access to Real

Time Pricing

Smart Inverter Communications I/O Standard- Wireless technology life cycles are 2-3 x faster than DER asset lives.

Adoption of any common carrier wireless services saves costs at the risk of early obsolescence An open I/O standard is a risk mitigation thatof early obsolescence. An open I/O standard is a risk mitigation that allows adoption of widely available low cost communications

Models for how socialized market benefits are used to cover DER visibility costs that are borne by DER owners / aggregators.- Control costs will be part of the overall economics of DR – market

payments for DR have to cover the convenience and technology costs

Ongoing review of NIST standards to ensure DER visibility is adequately addressed

Provisions for collection and maintenance of DER data size location etc Provisions for collection and maintenance of DER data – size, location, etc.

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Topics


Overview of Issues

Market Impacts



Market Impacts



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Project Overview: Demand Response Market Integration

Estimate Demand Response Potentials by TypeIdentify potential penetrations of dispatchable demand response (DDR) and dynamic pricing demand response (DP) on NYISO’s system by 2020.

Develop Model to Assess Market Integration• Examine real time energy marketsExamine real time energy markets • Explore dynamics by capturing timing of clearing and dispatch

Id tif I t d I li tiIdentify Impacts and Implications• Determine impacts on market prices and supply dispatch• Examine successful ways for integrating DP and DDR resources

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Market Dynamic SimulationDetailed dynamic model of an ISO market operation using system RT DDR

ResponseRT Supply Curve

+

RT DDR R

Theory Simulation

p g ydynamicsNon-linear supply curves representative of a real market & non-linear demand curves

RT Dispatch

ResponseRT Generation

Response +

+

+RT Price

RT DP Response+

+

-

+RT DDR Response

& non linear demand curves based on published research.Integrates day ahead, hour ahead, and real time energy market processes

RT Imbalance

RT Total DemandRT Total Supply

-+ +

RT TotalResponsive Demand

RT UnresponsiveDemand

+

-

++

RT DP ResponseRT Supply Response RT DP Response

market processes. Includes residential and commercial end-uses (HVAC, lighting, water heating, refrigeration)

Forecast DemandForecast Supply

RT Commitment-

+

++

RTC DDRResponse+

RTC GeneratorResponse

+

RTC DDR ResponseRTC Supply Response

refrigeration).Does not predict price but captures market dynamics

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Resource Benefits & Liabilities Benefits: Widespread source of an economic, low-emissions power resource Liabilities: Deviations between expected and actual and present-day difficulty in

forecasting voluntary responseforecasting voluntary response

A. Some regimes of demand side integration into the markets can result in unstable or undesirable market behavior.

Modeling considered dynamics of generation, demand, and market operation interactions. Scenarios of different relative supply and demand elasticities, and of different demand elasticity forecast errors demonstrates that there are regions where the system will not be stable.

B Alignment of demand side resources with market products in terms of technicalB. Alignment of demand side resources with market products in terms of technical performance is critical to stable market behavior.

If the generation is “slower” than the load response then instability can occur.- If generation is faster than demand & the market, the system is always stable.

If h di i i h f i f i & d d l i i h ill- If that condition is not met, then for some ratios of generation & demand elasticity the system will become unstable.

- If the market is “aware” of demand elasticity & factors this into the clearing, then the system is stable. The market stability is sensitive to the magnitude of error in estimating demand elasticity.

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Modeling Results (cont’d) DP impacts are very sensitive to DP penetration, demand elasticity, and the

accuracy of estimated demand elasticity in the market clearing algorithms.

Graph for RTD Price1,000

750

Graph for RTD Price1,000

750

Real Time (RTD) Price

750

500

$/M

W

750

500

$/M

W$/

MW

h

250

0

250

00 138 276 414 552 690 828 966 1104 1242 1380

Time (Minute)RTD Price : 7 dumb dp 2-5 RTCHRTD Price : 7 dumb dp 2 RTCHRTD Price : 7 dumb dp 1 RTCH

0 138 276 414 552 690 828 966 1104 1242 1380Time (Minute)

RTD Price : 7 dumb dp 2-5 RTCHRTD Price : 7 dumb dp 2 RTCHRTD Price : 7 dumb dp 1 RTCH

July - DP, 2.5 x penetrationJuly - DP, 2 x penetration

July DP 1 x penetrationRTD Price : 7 dumb dp 1 RTCHRTD Price : 7 dumb dp 1 RTCHJuly - DP, 1 x penetration

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As the amount of DP in the market increases, price potentially increases and can grow to be volatile.

DR Study Conclusions

Markets should explore how to integrate demand elasticity into market clearing algorithms and load forecasting, and how to estimate demand elasticity on an ongoing basisand how to estimate demand elasticity on an ongoing basis.

Aligning the duration and delays of DDR & DP resources with the frequency of market clearing & dispatches is an essential aspect of integrating these resources into wholesale markets and operations.

Market clearing algorithms should include actual DDR Market clearing algorithms should include actual DDR response and its duration (compared to expected response) in the load forecasting process

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Thank you

Alan Roark

Principal Consultant

Manager, Risk Assessments

DNV KEMA Energy & SustainabilityDNV KEMA Energy & Sustainability

4377 County Line Road

Chalfont, PA 18914 ,

Tel (215) 997-4500 ext 41274; Fax (215) 997-3818

Mobile: (267) 252-0305

Email: [email protected]

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